brought to you live from london, london, singapore, and around the world th this is this is "worldwide exchange." welc welcome to the show. greece greece to launch its mega debt swap with swap with private investors after after getting parliamentary approval. approval. the the first of a 130 billion euro bailout. b and tokyo stocks with their best best performance in two decade after wrap after wrapping the week at a seven-mo seven-month high.

in in the u.s. ai dw swings to a a big fourth quarter profit and the the bailed out insurance giant is is confident it generatin generating solid num several y severa and and ecb government lender says says there is no line in the sand sand for interest rates. >> we ha >> we have never said t flaw. flaw. so so private bondholders bracing bracing themselves for a loss on gr loss on greek bond holding as part part of a debt swap. up t up to 100 billion euros of the debt. debt. however, however, the documents object taped taped by "the financial times" suggest suggest european creditor countrie countries are still demanding further further spending cuts and tax reform as reform as part of bailout. german cha german chancellor ange is schedu is scheduled to meet je

juncker in juncker in the northern german city city for talks likely to focu on on the preparations for next week week in brussels. in an in in an interview with cnbc, the governori governoring councilmember said a haircut o haircut of greek debt is the cards. the cards. silvia silvia is on the g spoke to spoke to him in frankfurt. silvia? silvia? >> reporter: the no haircuts on greece, greece, i'm not surprised is the is the official ecb line and i daresay daresay at the moment it's not on on the cards because we've had the the decision out of brussels, of course, course, only last week when we -- we -- or was it this week? we we knew the ecb would the centr the central bank.

the the interesting take is that they gave they gave us. we never we never said that. >> >> we always focus on price stability stability and that, to me, was very very important, the inflation expecta expec follow follow them in the immediate long long term and there the situation has not created. as long as they are, of course, then we are delivering, so it's not out of the agenda. it's always there but it has not been upside. >> reporter: the markets have always said, and maybe us journalists have a line in the

sand at 1% on the down side, is that -- >> we have never said so. that there's a flaw. we will never say so. no technical object staals but everything, of course, depends on the economic side and monetary and our credit side. on the other hand, of course, your margin starts. >> reporter: if you had a list of worries right now in the monetary context, of course, what would be the biggest problem that you see right now? >> we come back to this real economy on the market side. we do the long term. the banks probably and, third, keep moving with economic reforms.

whether you are winning open markets or competition, huge incentive but it also gives you better growth for potential and unemployment. all these need to work at the same time. in the background, of course, the ecb and price stability and decisions. if you are not sure it will remain. decision makers have a second in their minds. they may do unreasonable things which don't serve any purpose for economic growth. >> well, it's also interesting, as i said, we've always thought there was this line in the sand that doesn't seem to be, on the other hand, the economy is picking up. maybe the ecb is not in a hurry for the rate cut but there could be further especially if the domestic money market remains kind of dysfunctional as it is

at the moment. it's easing up a bit with the first ltro, the next three-year l it tro, of course, hitting the market next week and possibly when we talk to the ecb again we talk about more long-term ltros coming down the pike. so far, of course, we only knew about the two operations but i daresay the three year is here to stay for a while. >> silvia, thank you very much for that. let's get more on this particular topic. joining us as our guest host for the next hour, andrew ferris, chief investment adviser for bnp paribas. greece talking about it. ecb, we're still talking about it. what's your prognosis for the eurozone recovery is this. >> one is hopefully greece will drop out of the radar screen for a while, while the quarterly me meetings and there are monthly meetings of their performance, fiscal performance goes on.

now whether this is going to be successful or not is going to, unfortunately, depend completely on the implementation of the additional rules that the european union has imposed. so now a couple of months greece looks on the radar screen. the next is what's going to happen with italy, with spain and with portugal and here, thank god, we are faced with a completely different set of problems because greece they ain't, in terms of their fiscal capabilities, in terms of their fiscal problems, and also of the implementation of their austerity measures. they're in a completely different class from greece. and i'm glad to see their two-year bond yels have been coming down quite significantly and there is a differentiation between portugal at roughly 50% and italy going down to well low -- the 5% level. so the markets are telling us that there is a differentiation between greece and the rest. i think this is very useful at

the time that the european central bank is about to implement ltro number two. in other words in translated english this is quantitative easing number two. so it looks good for the time being. >> it looks good for the timing, andrew, because debt bailout, we seem to be trying to solve the problem with you austerity also means a lot of pain. how exactly are countries like greece, for instance, going to grow their way out into a recovery? t are there measures this place for are that to happen? >> two answers here. there is a huge controversy and the imf is backing these, us austerity is not enough. austerity is unnecessary because then the countries can not grow sufficiently in order to generate the revenues that will then pay for their debt. unfortunately, once we are seeing all these, i have a group of creditors in front of me saying, can i please get paid and in the immortal words of james maguire, show me the

money. unfortunately, the money has to be shown first and that can only come out of austerity and it is a very pine if not impossible balance. now whether the greeks will be able to grow themselves out of it is going to be quite a tough proposition. effectively they did their work. quite a lot of structural issues that had to be implemented and incidentally in the famous linkeditems that they have to comply. in addition to austerity, one of them is the liberalization of a profession that was implemented by law but was never actually implemented in practice. very freaky. so the answer is, yes, sir, it is all very nice in our theory, but as a creditor i want to see the money first on the table and all the more better later on. >> andrew, if we are going to

see problems in other european countries coming center stage, why does the euro keep tracking higher against the dollar, for instance? we're around 1.34. >> simple answer. all the headlines are of the demise of europe, of the euro, they're going to go down the drain. you know, europe to call. an expression is toilet paper. january, the beginning of january, when greece went from 1.36 to 1.34. this simply tells us that the markets don't believe their stories. the european central bank does not, n-o-t, does not support in the forex markets. the bank of japan may but the ecb doesn't. it may buy euro denominated assets. that supports interest rates not the exchange rate. so my completely stupid answer

to a very, very wise question is, it's the markets, stupid. >> andrew, thanks for that. andrew sticks around for a bit longer. andrew freris will be with us for some time to come. thank you to silvia. she'll be back in the show to bring us more comments from that ecb member as well. christine? meantime, asian markets mostly higher but trade cautious. we had good data from the u.s. but, you know what, we had high oil prices and that's tempering some of the gains we see here in asia. the shanghai composite is up. sixth weekly gain. apparently the property developers are leading the way higher on talk, on speculation that could be reforms in the household registration policy. the hang seng modestly higher, 0.1%, mostly on profit taking but holding on to the key 21,000 level. over in taiwan modest gains. australia 0.5% higher. politics not really affecting a

leadership crisis. not affecting the sentiment right now but we had, of course, u.s. better than expected economic data that was offset, of course, by the sevcentral ba to say rates are going to be on hold for now, dashing hopes for a policy cut there. nikkei 225 is up 0.5%. once again holding on to those levels. kospi 0.6% and the sensex, one of the few markets that trade lower down more than 1%. becky, how does your heat map say on this friday? we have lots of green around. this is the picture as it's shaping up across europe. it's a positive one, too. overall the stoxx 600 is higher by 0.3%. it's still positive nonetheless and this is how the picture is shaping up around the region. the ftse mib 0.7% higher. outperformance there. half a percent higher for the cac. the dak up nearly 1% and here in the uk the ftse 100 is

marginally higher to the good. i do want to point out some individual stocks that are moving quite large way in each direction. eiffage is the biggest duanway p over 12%. earnings down by 11% but they are optimistic on the outlook on revenue growth and margins. that is sending the stock higher. telecom italia 6.7% move to the upside. they have cut the dividend as they try to reduce costs. they can increase the revenue and core earnings on the back of growth in south america in particular in cost cuts so the markets are impress ed with the efforts that company is making. a couple of stocks to the financial sector moving lower today. 2.4% down for dexia which came out with a poor set of numbers yesterday. this is a franco belgian bailed out institution continuing to have problems there. yesterday reporting a loss of

11.06 billion euros and telling us their very survival is at risk this stage. reports out overnight suggesting that the government has agreed -- the belgian government has agreed to more state guarantees so that stock is continuing to decline. one of the big earning stories, lloyd's down by nearly 2.4% after that company reported a net loss of 3.5 billion pounds. of course this is another company which is 40% state owned in this instance. they also said they see a challenging 2012, too. so let's move on and talk about the oil markets. christine mentioned this a few moments ago that we continue to see oil gaining. i want to give you that six-month view of what's going on with oil because we can see clearly that since the very end of 2011 oil prices from late december have really pushed a great deal higher over the past six months up by 12.4%. this is for brent, of course. in fact, from the january lows we are up by even higher than that. gains coming through because of

political tensions around iran, also the positive u.s. economic data has sent oil higher, too. currently trading for brent at 12 123.84. just off the high, up over 124 a little bit earlier on but gains for the oil market in general. let's also talk about what andrew thinks on the oil market. christine, to you. >> totally, beccy. andrew, you heard what beccy talked about, giving us a six is-month chart as well. market gains are being capped on what's happening in the oil market. at what level would it start to choke off the global recovery? >> whoa, whoa, whoa. let's take a break here. united states at best is going to have very flat growth over the course of '12, well below its potential. in the case of europe, we do expect negative growth. we do expect a real recession. year to year the euro will

shrink. japan had three quarters of negative and only one positive. every economy is slowing down from a very high level and a very modest basis. so really i can't see growth demand coming out from any of those economies. what we might see is the pressure on oil that has come partially out of the supply constraints and out 0 of the fact that demand has not dropped very significantly so i reckon the price of oil even if i'm looking at crude, let's say no more than 110 is just about there. now we enter into the completely uncharted territory where an enormous amount of, let's say, well informed nonacceptsense, w iran is attacked and what if this happens and what is going to happen to the oil price. looking at pure micro economics, let's say i'm neutral as opposed to bearish in terms of the impact of further increasing the

price of oil on 0 global growth. >> all right. $110 is what you mentioned. andrew, thank you for your thoughts. you will continue to stay on with us as our guest host. still to come, the battle for the top job in australia's current labor government steps up a notch. he will contest the leadership. we'll take a look at the implications of that after the break. i look at her, and i just want to give her everything. yeah, you -- you know, everything can cost upwards of...[ whistles ] i did not want to think about that. relax, relax, relax. look at me, look at me. three words, dad -- e-trade financial consultants. so i can just go talk to 'em? just walk right in and talk to 'em. dude, those guys are pros. they'll hook you up with a solid plan. they'll -- wa-- wa-- wait a minute. bobby? bobby! what are you doing, man?

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welcome back to "worldwide exchange." focusing on australia, the country looks set for a leadership showdown. at stake julia gillard holds as prime minister. >> reporter: the stage has been set for a bitter leadership ballot that will take place monday morning at 10:00 a.m. after foreign minister kevin rudd confirmed he would challenge julia gillard for the labor party and claim the job she took from him in june 2010. mr. rudd spoke to the media in brisbane saying he believed he had to do what was best for australia and finish the job

that he started back in 2007 before being ousted. says rightly or wrongly prime minister gillard has lost the trust of the australian people. >> it's no secret that our government has a lot of work to do if it is to regain the confidence of the australian people. rightly or wrongly, julie has lost the trust of the australian people and starting on monday, i want to start restoring that trust. that's why i've decided to contest the leadership of the australian labor party. the ballots and the focus of the us a tr australian labor party on monday. >> reporter: earlier in the day mr. rudd arrived back from the united states where he told reporters he had been shocked by the personal attacks leveled against him by the prime minister and some senior cabinet members. for her part, julie gillard says her record of implementing tough reforms speaks for itself and that she should be re-elected to party leader. >> the choice that the nation

faces and my parliamentary colleagues face on monday is a choice who has the character, the temperament, the strength to deliver on behalf of the us a trail ian people. this isn't is celebrity big brother. it is about working out who can lead the nation. who has got the ability to get things done. >> reporter: over the weekend both of these candidates will, no doubt, be working the phones to try and drum up support. so far reports say that julia gillard has the numbers to be re-elected on monday. back over to you. >> that was matt taylor talking to us. australian stocks largely dismissing the unfolding political drama. take a look at aussie/dollar. the aussie/dollar is tracking higher in tandem with what's happening in the eurozone, in tandem with the stronger euro. let's get more reaction, more analysis with adam lyle, a member of the chamber of commerce here in singapore.

good to have you with us. watching this drama unfold in australia, rudd is saying that gillard has lost the trust and confidence of the australian people. do you share those comments? >> i think he's obviously going to say that and he wants to challenge her. i think tough times at the moment. she is is dealing with a lot of tough issues. so i don't think you can say that she has lost the trust of the australian people. >> you look at rudd, according to the polls, he is popular with the people. can he muster support to pose a se serious challenge to gillard? >> i think that's exactly the issue. if you look at the numbers, 69 to 28 and a few swinging, the numbers are very much in the prime minister's favor. but then again there's a weekend ahead and a lot will happen in a weekend in australia. >> what happens if rudd wins? that's going to be a problem. it could trigger early election. >> we have to wait and see what happens. if he wins, julia has said that

she will go to the back bench and whether or not he feels it's appropriate to call an early election or not. i couldn't speak for him at this point. >> adam, let's look at this from the outside, clearly there's party politics and an infighting story within australia but sitting here in europe, what difference does it make to investors and watchers elsewhere in the world who is in charming in australia? what are the issues they will differ on? >> well, as you can see if we pick two, mining tax, they're both in favor of that. what foreign investors are looking at is certainly stability, the record of the australian economy, both under rudd and gillard. investors are looking for stability. we just had great low unemployment figures release

this had week so the economy is in great shape. so it's very much an internal matter and i think the rest of the world will get on with it and wait for the results on monday. >> now if this was to trigger an election, it isn't likely that the labor is not going to keep its incredible majority of one. what is your position to be bullish for the aussie dollar? looking like a hawk on the aussie dollar. >> stability is something that's key, isn't it, adam? this is the last thing the australian economy needs right now. are we going to get that stability? where is that stability going to come from? >> the stability is going to be once it's resolved, what business wants to see is stability. get on with the business of doing government, what government should be doing, and let business continue to get on.

it's a distraction. but australian business just is very resolute. it's going on, yes, it's a distraction but it's getting on with its daily business and doing good business at the moment. >> adam, thuchl for your thoughts. let's see how things develop next week. that was a board member of the australian chamber of commerce. beccy? >> we'll see what occurs next week. coming up on today's program we have more from that exclusive interview with government councilmember liikanen. >> it is very clear here what the ecb did was done for public policy purposes and we are outside of bsi. on the other hand, of course, it's not to create profits. it's not a profit seeking operation. the revenue is to get on these

we pass. it is part of a normal dividend policy. and it's for the states to decide.

welcome to the show. the headlines today greece is

set to launch its mega debt swap with private investors after the measure is passed in parliament. its first step to a much-needed bailout fund. ecb governing councilmember liikanen tells cnbc the central bank is not going back to the negotiating table on greece. >> i think now we need to implement what europe has decided as such. >> and tokyo stocks near the best performers in two decades after wrapping the week at a seven-month high. in the u.s. aig swings to a big fourth quarter profit and bailed out insurance giant is confident it can keep generating solid numbers for several years. so we have the revised fourth quarter gdp numbers for the uk just coming through. fourth quarter gdp unrevised on a quarter on quarter basis with decliners 0.2%.

2011 gdp, though, for the year on year basis revised to 0.8%. let's get a comment from our next guest, james ferguson, head of west house securities. so a little change to the figures for uk gdp. where does this leave you thinking? are we right to stick with the austerity measures? >> the bank of england voted pretty emphatically on that. we've had not one about but two recent qe injections so certainly at the end of last year we were very worried. they have been saying the uk might be going into a serious contraction as we headed into 2012. so they've been nervous to boost with qe. growth in the uk has been the weakest of any major economic

area. we needed qe 2 i'm not sure if we needed qe 3 or not but they seemed nervous for the outcome for this year. >> what will be the tends that will drive the economy in 2012 and are we looking at more weakness based on what's going on in the rest of the eurozone or can the uk find some strength within its own fundamentals? >> the areas that are strong at the moment in the uk are particularly manufacturing is looking very good. the weurrency we've had now for more than two yankees and it usually takes a two-year lag before they can feed into boosting manufacturing but our biggest trade partner is europe so obviously we have a problem there in terms of stronger areas facing a europe that looks like it's going to go into a recession. no one looks that clever on growth for 2012. even the u.s. which is the winner of the ugly contest, if you like, still isn't going to be knocking any lats out in 2012 and a lot of losses that the u.s. has to face.

so it's not at all clear where we get the good growth numbers from in 2012 and the uk is kind of stuck in the middle. we'll be lucky, i think, to keep the growth level above the zero line. >> andrew has a question. >> in the context of all this happening, what is your outlook for the sterling? it has not been doing too badly so far. do you reckon we might see, you know, it creep up against the u.s. dollar? >> not against the u.s. that are. for the last five years it has been under constant pressure because it's been pushed down and down by quantitative easing which acts like interest rate cuts so it's had a massive differential against it compared to, say, the euro, a classic example it hasn't been doing any qe. that will change. in the next five years it will be doing dilutive action on its currency and the u.s. has another -- the dollar has another strong push behind it

from what's happening with hydraulic fracturing which will lower the u.s. requirement of relian reliance. now for the dollar is very, very strong. the outlook for the euro is weak and sterling is kind of in the middle. it'll go down against the dollar and up against the euro. >> james, stick around. i wanted to just get out to silvia and get some more from her on the interview with liikanen who said they should not open, quote, any new highways on greece. silvia, expand on that, please. >> reporter: well, the bottom line is that the ecb has followed that tune for a long time but arguably so. give it some time, stick to the program. we have a deal on the table now for fwrooes. let this deal be implemented and not start all over again. of course there's a little bit of self-interest in there. the ecb sticks to the line there's no psi 2, no public seco sector haircuts.

it means no haircuts for the ecb but here is what mr. liikanen had to say about greece, et cetera. >> it was very clear that what the ecb did was done for public policy purposes. and we are outside of bsi. on the other hand, of course, public policy purpose is not to create profits. the profits you get on these we pass to states as part of a normal dividend policy and this is for the states to decide. i think the difference should be kept intact and it is so i think now we need to implement what europe would have decided as such and not open any new highways. >> reporter: have you ever in this process felt pressured either by public opinion or by

political opinion as an institution to yet again do more, to step in as a lend earp of last resort, to go even more outside your mandate than anybody has asked before? it seems whenever something hits the fan, to put it mildly, they say the ecb is the only institution that can can fix it so they must fix it. >> i think the ecb has a clear mandate. it is a clear structure and it can function independently, swiftly. but, of course, it's also important that what is most critical is the credibility. people stick to price stability. we don't let it just run away from our focufocus. they pressure us in europe don't

do more and don't do much. perhaps the political geography in europe also helps that we have the pros and cons. we have different popinions. for the ecb governing council, the strength but with one condition. we are always able to act. we act for the issues when they emerge. i think the ecb has done its best and i'm sure you will do so, also, in the future. >> silvia sticks around to get involved in this conversation but i do want to get back to james ferguson, head of strategy at west house securities on some of these issues. when we look at what the ecb has done around the greek situation, do you think they've got the balance right between being firm with greece and moral hazard that could affect the rest of the countries that are struggling now and helping

greece to get over the problems that they're in? >> there almost isn't a correct answer. if you basically come down too hard on greece as the austerity measures kick in, then you lose the german populace and the strong economies of europe who refuse to bankroll a country making seemingly to their eyes no effort whatsoever to pay taxes, to work until proper retirement age, et cetera, et cetera. on the other hand if you don't, you know, pursue a strategy or pursue the strategy that penalizes the greeks, then, as they get to be penalized, they can't grow their way out of trouble. you are courting a difficult position. what we end up doing is just enough of the austerity to basically humor those that are paying in europe. but that's enough to send the greeks rioting. and sort of at the same time giving the greeks some latitude to try and grow their way out.

but what have tgreeks got to grw out with? they haven't got the currency they would normally lower to deal with the problem. so the greek problem looks quite intractable, similar to spain. spain's problem might also be equally intractable. italy, which the markets were very nervous about end of last year, looks in a better position, i think, on that front. it has got the industries and is running a primary surplus. >> reporter: do you think spain is in the same position? everybody insists spap is not another greece. portugal is not another greece. is spain at least you pointed out greece olive oil, feta cheese and mid-sized industry but nothing to pull us out of the doldrums. spain does have their productivity problems with you they do have a different power to get themselves out of there. do the markets still think we're going to have this domino effect or have we kicked that down the road long enough to give us a bit of breathing space with the

greek deal on the table now? >> i suspect the markets will allow us some breathing space because the immediate problem greece has been in the near term dealt with. having said that, greece has proven the problem that was always state d about the euro right from the very beginning and that problem is if you don't allow currencies movement to make adjustments then you'll have to make fiscal transfers instead. the countries that will have to pay for that are just not the happy at all about that side of the bargain so they're imposing some austerity on the countries that are going to be recipients and those countries loathe having those austerity measures and foreigners, you know, dictating rules to them. part of the latest bailout package will have euro observers on a permanent basis to make sure that taxes are collected, to make sure that promises are being held to. one of the things we have seen the greeks are better at making promises than delivering on them. tax take last year plummeted which means even those who were

paying tax seem to be less keen on it now. i think we're going to get a host of fantastically unbelievable inside stories coming out when finnish and dutch and german nationals get to see inside the greek institutions and see the stories that come out of there. i think kicking the can down the road is really buying relatively small amounts of time, very expensively. >> james, i would like to have another chat with you before you go if that's okay. sti stay with us and thanks to silvia for bringing us a bit more of that interview. so volkswagen has released its four-year results. patricia joins us now with more detail. patricia? >> reporter: well, we are being hit with the numbers absolutely, basically without expectations in the sense that we're looking at these numbers. they look better than the actual politics. expect the numbers to come through on monday. net profit is better than expected $15.8 billion.

revenue much better than the 156 expected. the dividends look fairly firm for every ordinary share. three euros are being paid to every shareholder. eps also at 33 euros and one is much better for the full year 2011 than expected point streak. in terms of the delivery numbers, they delivered over 8 million cars so that 8.3 million delivered, an increase of 14.7% year on year. the numbers look firm. we'll have to see how the stock is trading, still down. remember, the automotive sector in general had a fantastic rally in 2011. i haven't seen anything yet on the outlook. i do suspect that we will get a little bit more detail during the day. however, unexpected numbers -- unexpectedly good numbers for volkswagen. back to you. >> pa trish wra, thank you very much for that. let's get to lloyd's. shares trading lower after the firm warned that revenues are

like likely to fall in 2012 as the banking giant posted 3.5 billion pounds in losses for 2011 brought in line with consensus. the stock is trading down 2.4% and of course it is one of the institutions which is state owned. 40% state owned in this case. james is still with us. what do you make of the prospects for lloyd's? how are they managing to get themselves out at the moment? >> well, the main thing about all the banks right across europe, really, in a way we're kitchen sinking because we know for a very large number of banks first quarter numbers will be very much better because of the ltro. that's very nice, cheap funding coming this. banks are able to do a trade. before this ltro in italy, for example, six-month government debt. yielding 6%. now yield iing 1%. banks are just piled into the short dated space.

it's a way to recapitalize on the sly, as it were. we don't have the advantage these peripheral banks have had in terms of our local gilt yields have never been up high so the banks can't really take advantage of that. but we have a very reasonable chance on the income statement basis making profit. the problem with the banks has been and will be until the crisis the balance sheet and the problem with the balance sheet is that we have losses hiding which have to be processed. lloyd's biggest potential risk is its massive exposure to the mortgage market. inherited from the halifax part. and at some stage when the banking system in general is fixed. interest rates have to normalize and when they do, that part of the book -- mortgages are only paying an average of 2.77%.

so normalized to 5%. that will mean that mortgage only will jump up to 7%, even 8%, and these big 160% plus increases in people's monthly payments. and we estimate about 270 billion plus of interest only mort dwajs that are not backed by savings product and that is a very big chunk of the uk market which is very exposed to any increase in interest rates and lloyd's holds most of that. >> could lloyd's get away with it, though, because it looks like interest rates are going to be very low for a very long time and maybe by the time interest rates start to come back and the system is repaired we have a decent clip of growth in the uk. wages are going up. we have higher levels of employment. could they get away with it in the long term? >> in a funny sort of way the lloyd's problem is a strong reason for why interest rates will stay low. the bank of england is as aware of this story as we are and

looks at this, later we're going to have another problem which is how on earth do we bring interest rates back up to a normal level or do that without triggering a secondary crisis. certainly we would hope we are through the crisis, that bank lending is returning to normal and that growth, private the sector growth can return to some degree of normalcy. the fact is we're talking about a very big leap going from half a percent back to 5.5%, a massive percentage leap. most people are very used to the fact of interest rates at half a percent. interest rates are not the lowest level for 320 years. they're one quarter of the previous lowest level for 320 years. we are in very, very exceptional circumstances and people have become used to it. they're going to be shocked and horrified when rates do go up. >> i certainly enjoy paying a low interest rate on my mortgage. >> you are not alone. >> yes. okay. well, let's hope interest rates stay low so i can have more disposable income. a completely selfish

perspective. thank you and enjoyed having a chat with you on these issues. christine? beccy, focusing, of course, on apple. the company may have scored a big win at its shareholders meeting yesterday and promised share hoe shareholders a bigger say in board membership and a possible dividend payout. the u.s. tech giant faces problems over here in asia. and tracey chang has been looking at the story and tells us more. tracey? there's a new twist on apple with the hong kong listed manufacturer of displays. they have filed a lawsuit in the u.s. tech giant's home turf of california and accusing apple of deceptive behaviors when they tried to purchase or they purchased the ipad trademark back in 2009. the move comes after the shanghai court rejected pro-view's bid to stop from selling the ipad tablets in the city yesterday.

but, however, the future for apple's ipad sales in china rehaynes unclear. it seems proview has a lawsuit pending in multiple cities across mainland china. it will hinge on a higher court hearing where an earlier ruling went in proview's favor and that hearing is set for next february, february the 29th, i believe. back to you, christine. >> it is 29. you are right. tracey, thank you very much. tracey chang. a final thought now from our guest host andrew freris. this case with apple shows how murky the trademark laws are, isn't it? >> but it's interesting to see that for a change instead of the americans complaining that somebody else is stealing their trademarks, actually it's the other way around. let's not forget the chinese have repeatedly said that one of the major issues within china is the fact that the chinese are stealing trademarks from other chinese. it is not just a matter of

international piracy but domestic piracy and repeated examples of chinese companies suing other companies over issues of potential piracy. >> but having said that, this is a country, of course, grows near 9% a year. compared to the whole global economy, china is still doing very well. how bullish are you on china at this stage? >> actually, i am bullish but in a very they go tiff way because, of course, china has consiste consistently had the highest gdp growth rate anywhere effectively in the world although from 12% to 9%. in the last three years had consistently and persistently one of the worst equity markets in asia. so gdp doesn't necessarily buy you good equity performance. so i'm much more keen in looking at where chinese monetary policy is going to go and also picking some of the smaller winners within asia that are not necessarily high on the stakes of gdp growth, have been persistently very good

performers and specifically in thailand, malaysia, indonesia and the philippines so china is a great gdp story but not necessarily a very good equity story. not saying it's going to do badly but it doesn't buy you high earnings and doesn't buy you equity performance. >> in terms of sectors, andrew, give us something to pick on as an investor. >> i must admit strong on the fixed income side. as we have been hearing, zero interest rates the next three to four years. gentlem japan zero interest rates. the united states in the year 2014. the european central bank is not going to increase, never mind cut interest rates for quite a while. asian interest rates have been coming down, we can still give you very substantial returns with the possibility of an increase in the exchange rate. on the equity side we tend to be more prepared and more focused.

so equities, yes, very much. we are looking at equities but in the case of overall performance fixed income is like ly to be a good winner for this year. >> point taken. always great talking to you and having you as our guest host. andrew freris for asia, bnp paribas wealth management. >> it's time for another break. still to come hollywood is gearing up for the oscars on n sunday. will it be a silent movie that gets the top award? some predictions up next and who do you think should win? get in touch. e-mail us or head to twitter. follow me @beccy meehan and let me know what you think. there's nothing worse than going to the post office and waiting in line. i don't have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps.com, you can print real u.s. postage

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thanks for staying with us. kayla joins us for the rest of the show. i'm sure one of the things you are going to do this weekend, as am i, checking out what happens at the oscars. hollywood rolling out the red carpet this weekend. who will take home an oscar? so i haven't been that great

with movies this year, i have to say. what are some of the big names that are a sure thing for some big awards this weekend? >> well, the oscars are sometimes the pinnacle of the awards season and there's an element of a big push behind the artists particularly. best actress and adapted screen. oscars traditionally do reward the sure-fire winner. we've had a lot of it shall and particularly when the director's guild award and pro-tuesdayer guild award. there's probably competition from "the help" which is annen semable cast. a lot would want it to be george clooney's year but has won every major a ward in that category so perhaps he's going to be the sure-fire winner.

there will be a big surprise if george clooney won for "the descenden descendents" and for "the help." that would be a really big surprise but actually the big money all behind artists. it's probably going to be the silent year for the big night. >> mimi, this is christine. what about meryl streep's portrayal of margaret that thor? what are her chances there? >> i think it's a really interesting question. of course she's a huge american star. she won the award recently. whether it's too much of a british film for an academy audience is going to be very interesting. i think there's a lot of momentum behind "the help" because it has a number of ensemble cast. i think that there might be -- obviously meryl streep is a huge star and this is a great, sort

of fabulous award for her but maybe "the help" is just going to be the pick on the night. >> as always, mimi, the oscars will be much watched. thank you for joining us. mimi turner, editor of the hollywood reporter. we have to say good-bye to our asian audience. we have plenty more coming up on the show. we have, of course, what's happening in the eurozone. we hear more from that exclusive interview with the governing councilmember erkki liikanen.

welcome to the show. the head lines from around the globe this morning, and the u.s. aig swings to a big fourth quarter profit and a bailed out insurance giant is can haonfide can keep generating solid numbers for several years. >> greece launches mega debt after gaining parliamentary approval. the first in a $130 billion wror owe bailout. and volkswagen doubles its profits. the german automaker lifts its

dividend to three yeuro per share. and ecb governing councilmember erkki liikanen says the ltro operation will stabilize the debt markets. >> this experience is little changes the picture but i'm very convinced. we remain strong. you are watching "worldwide exchange." great to have you here with us on this friday in february. we would see futures climbing in the early morning. the s&p would open about six points to the green. the dow would open about 47 points to the positive and the nasdaq up just about 13 points there. we've seen the markets rally throughout the week. we'll have to see whether the u.s. for its part can actually close in the green. beccy. >> we should have our eyes on

that, kayla. thank you very much. in an exclusive interview ecb governing councilmember erkki liikanen said policy could be loosened further. silvia in frankfurt and picked up on those comments he made. silvia, what did he actually say? >> reporter: well, the big question has always been how far down can the ecb go or does the ecb want to go? technically there shouldn't be any problem to take interest rates lower but there was always the perceived line in the sand and the flaw of 1%. liikanen put an end to that assumption. >> there are no it technical obstacles but everything, of course, depends on the economic side. on the other hand, of course, your margin. >> reporter: he clearly said there is no line in the sand.

there is no flaw. we never said this and i don't think we ever will. so we might safely take that as an assumption that we might see interest rates a tad lower somewhere there in the near future. but with the slight uptick on the economic picture we don't need to go there quite yet. we heard mario draghi saying the economy is looking a little stabilized. we point it in the same direction, said the latest data we've seen kind of confirmed that the economy is stabilizing. and, again, that's the big question, of course. the ecb will play a little closer to the chest but hoping that the ltro operations are going to be the big game changer rather than rate cuts and i think they're probably right there. we've seen that already with the loosening up of the money market, the situation there is a little bit easier and we've also

seen that with bleeding through the yield spread at least at the shorter end of the market that yields have come down. >> okay. silvia, thank you. stick around, we'll talk about the ltro a bit later. i want to get into more on this rates issue with our guest host, michael brown. also joining us in the studio is the professor of economics from the university of chicago school of business. and let me start with you. you used to be at the fed as well, if i'm right. >> yes. >> until 2009. >> yes. we brought interest rates down to zero there so we know we can do it. >> exactly was going to be my question. liikanen was talking about there's no technical flaw at 1%, we can go lower. just talking through what that would mean for the ecb to take rates yet lower and lower. >> i think he was exactly right to look at the economic situation. by no means a promise that they are going to go down to zero or

close to zero but there's no technical barrier to that just in the federal reserve we reduced interest rates to zero and 25 basis points. the ecb could cut rates to bring it lower. >> what difference does it make, how does that filter through the economy when you start to cut rates lower? it's pretty obvious when you cut rates from 5% to 4% the difference that it makes. >> sure. >> when you get to the very low rates, what difference does it make on the margin? >> if you lower the rate it makes it less expensive for people to borrow, more private to beat that rate. the question is how much demand will there be? even if you have rates really low, if people are really, really uncertain about where things are going, they're not going to borrow and that's the situation in the u.s. for a while. starting to see some recovery but it's been slow. >> do you think if we get rates really, really low for europe, will that be, as an investor, would that be enough to make you feel more optimistic? >> slightly take issue here

because europe is a patchwork quilt in terms of the impact the lower rate of interest will have. if you're in spain, not the base rate but the three-month rate, that will have a big influence on the individual person. but no german cares. doesn't have any influence whatsoever on the german consumer, virtually no interest for the german court. in fact, in italy it's destructive because of a large proportion of the consumer's wealth and income comes from savings which has dwindled over time which explains why the consumer has been so weak in an era of declining interest rates. doesn't make much difference. so because we're not geared in europe to short-term rates, it's very arguable as it to how effective a rate cut will be except to put more backbone into the financial markets and continue the positive progress

we've seen the l it tro brought. >> it's the point, isn't it, randy, the whole situation for the eurozone is a very different one because we have this patchwork of different countries and different economic situations in the way there isn't in the states. they differ between each other. it's a different environment at these low levels. >> the money does flow across the borders and markets are interlinked and so if you reduce the rates the central bank is offering that will have is an impact. look at the ltros. that has had a big impact throughout the entire eurozone. >> this is kayla back at hq in englewood. good to have you here. obviously low rates have been the story here for quite some time. we've been able to turn a blind eye because we expect it to stay that way for so long. we are looking at the ltro. it's the reverse where u.s. investors are saying we're worried that the size of the

ltro or the structural elements will kill this monster rally we've been able to see. what type of facility do you think the market needs to be able to continue moving in a positive direction? >> well, i think it's going to be determined by how many people come to borrow, certainly we saw a pretty significant borrowing. the there's been a lot of debate on whether it will be a big one or not on the second one. there is the debate between mario draghi and ackerman over whether it was important or not -- whether it would be a man or not if you took this money from the ecb. i think it's important there not be a stigma associated with lenders of last resort lending because that's the whole point of having these kinds of facilities. and so if the markets seem to need it, they should take it wn. >> i think that the amount will be similar to last time. i talk to the ceos and the sense i get is the amounts they are talking about are almost

identical to last time. the germans hate it because they can't make any money out of it whatever so and they're furious because it's a transfer of wealth. a absolutely. that's the idea. it is a transfer away from savers to those people who borrowed over time to alleviate the pressure. so the size similar to last time. the efficiency, i'll make or bet, 12 months. >> silvia? >> reporter: how petty of us german who is hate something when we can't make a profit on it. but more seriously speaking in terms of what the ecb is trying to do, they have the same problem in a way that the bank had a long time ago, trying to influence long-term interest rates by short-term policy measures, how much can this ltro -- and i think you're quite right. this is not the last one we've seen, this special temporary

measure will probably be temporary for quite some time. how much can this bleed through the yield curve, as it were, to give us more ease not only for up to three years but maybe as a confidence measure for further? >> and so i think it's something that can be helpful but it may not be the only thing. certainly in the u.s. after bringing the short rates down to close to zero the federal reserve has undertaken the operation twist that selling off securities and buying the long term to try to bring the longer rates down and so that's -- it may be that to get the long rates down you need a little bit more there. but certainly providing more liquidity in the short run has helped to bring down risk spreads. >> i think there's two factors here. one is that draghi has been able to reduce three-month in the space of two months. huge success and that's obviously important overall in terms of the rate setting mechanism. now to do further you have to take that further down. you have to move it to half a

percent if you're going to have the rate cut that is now being debated across europe. but,ly we have to look at the oms market that got to almost 100 basis points. that has been interesting for me, in the states, having had a small fall, is start to go rise again. another ltro action from the fed in the short term. things are squeezing on the dollar side in a way that they are -- a negative momentum where there's a positive in europe at the moment. >> i think it's gone too far. we were looking very much at those spreads you were talking about. the banks weren't able to get the liquidity to survive and the lend lender of last resort is suppose issed to be providing that and so the fed will be looking at that spread like a hawk. i don't think it's gotten large

muff to generate any action but it is something that is worthwhile watching. >> and the one spread that hasn't moved this year and over the last six months, the uk, which is why you had quantitative easing last week and why you will have more short term in the uk because those spreads are not moving and that's negative. >> michael, we keep talking about bringing rates down. is nip in the eurozone looking at the japan scenario and the lessons learned from the boj where they kept rates at near zero for so many years and the economy is in such a state? >> well, not in the eurozone, christine. the bank pulled the same trick last august. now it's interesting because sevcentral bankers, and correct if i'm wrong, central bankers when something works, we have it working in thames of moving their currencies. now we have the japanese. so who is next on the aggressive printing, who cares what happens over the next six months? >> i think -- i wouldn't say who

cares what happens but they didn't care enough about what was happening. they allowed deflation to take hold and that was a real problem. i think it's great that they have now stated an explicit inflation target that is positive and they are trying to get there because that's one of the challenges that japan has had. they got into the deflation situation. they haven't been able to get out of it. the u.s. is aggressive in trying to avoid a deflation situation and i think is doing the job, also. >> many thanks to you, michael and randy. this has been a pleasure. we'll keep you around and, unfortunately, we do have to say good-bye to christine tan in si singapore. christine, have a great weekend. and stay tuned to cnbc. treasury secretary tim geithner will be on at 8:30 a.m. eastern time. still to come, oil on the boil. will we see oil at $200 a barrel by the end of the year? we'll ask our panel of experts after the break.

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at this hour if the u.s. markets were to open, we would see the s&p 500 up just 5 1/2 points, the dow 43 points into the green coming off a little bit from the morning highs in the futures market and the nasdaq would be up just about 12 points.

let's head over to beccy meehan. >> the equity markets around europe, this is the picture. we are off the highs of the session but still dominated by gains on the stock markets. the stoxx 600 overall is higher by 0.4%. we did have fresh highs within the past few minutes coming off those levels now. this is how it looks around the region. ftse 100 is hovering around the unchanged level. we had earnings from lloyd's which is rather low in compared to its peers. in germany up by nearly 1%. half a percent higher for the cac in paris and the ftse mib in italy up by just about 1%. speaking of italy, let me just give you a bit of information on what's going on on the bond markets and the italian yields are worth checking in on. we had italy selling the maximum amounts targeted for the zero coupon two-year bond in yields at 3.013%. last time around it was 3.763% on that two year and the lowest

since may. so that continuing the theme of yields declining. this is where the treasury has done right now just over 2% on the ten year in the states. here in the uk 2.09 ruffle. in italy that's the ten year, 5.47 is where you are roughly and in germany the ten year at 1. 1.89. let's talk about the individual movers on the markets across this region. eiffage is the biggest gainer. 12.7% higher for the shares of this company after they came out with earnings. it's a french construction company but actually earnings fell by over 11%. the outlook that was very optimistic. they believe sales and margins will improve in 2012 so the stock is reacting accordingly. telecom italia up over 6%. they came out with its figures, too, cutting back on dividend trying to get to grips with their debt pile. they also said that revenue core earnings have increased on cost cuts of growth in the south

american business. on the down side dexia, a bailed out franco belgian financial group. they came out with very bad figures yesterday, frankly. the can company said a net loss of some 11.6 billion euros, also the very existence of the business remains perilous and we've had reports they have received further state guarantees from the belgian government so the stock is down on the back of that news, one of the biggest decliners. lloyd's is lower by 1.3% after it came out with its earnings. lloyd's, of course, is 40% state owned and had a loss, a net loss of 3.5 billion pounds, also see as challenging 2012. now one of the challenges that faces many businesses at the moment is the price of oil. i want to draw to your attention what's been going on with crude. this is a chart which shows what's been happening over the past six months and since we have these lows in late january we've seen a very steep climb to

the upside. in fact even before the gains of today we had gains for brent of about 12.6% from those mid-january or late january lows. we had seen oil move back from those levels now. over $124 a barrel. now we're at $123.61. the few factors feeding into this not the least the geopolitical attentions around the situation with iran and the nuclear ambitions. that has just continued to factor more risk into the oil price plus the other factor of the last couple of days, there has been an impact there, too. just hovering around $123, $124, christine. >> beccy, the price of oil keeping trade cautious. seeing some of the markets, most of the markets, rise here in asia finishing on a good note. over in china, the property

developers were clearly in focus on speculation reforms were happening in the household rejs raci registration sector. much of the rally didn't go into the hong kong market. instead the hang seng was almost flat on profit taking. some pressure there. the taiwan weighted index up. the australian market up. ignoring a political drama unfolding, of course, over state side. the nikkei 225 up. breaking through the key 9,600 level. the topix up. the sensex, one of the few markets in india to trade lower, 0.9%. a quick break. still to come, though, we'll ask our distinguished panel if oil will be the biggest headwind for the global economy this year. wanna know the difference between a trader and an elite trader?

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so campaigning has begun. since the disputed election in 2009 that saw mahmoud ahmadinejad re-elected sparking months of protests. the election on march 2nd, next friday, a contest between the

conservatives. fueling the oil prices. brent crude is locked into its fifth week gain. professor of economics at the university of chicago school of business. so how much of an impact is oil going to have on the recovery? let's start with you. we are seeing some decent u.s. economic data. >> sure. >> our previous guest described it as u.s. wins the ugly contest. but we are seeing some sort of growth. going higher still be enough? >> i don't think they're quite high enough to put enough of a burden on the u.s. economy to slow it down. we've had some before, though, when the u.s. labor market, we had some very good numbers in early 2010 which then fell off in 2011 which then fell off so a few more months of data to make

sure we have really got consistent and solid recovery here. i think at these levels they're not so high they will stave off further growth. >> we're pretty much back to where we were last year. it's not going to have that big an influence year on year. the issue comes in august when clearly prices fell by 30% from where we are now and if we don't get that price then we'll start to see a squeeze on september in the fourth quarter. the consumer, per se, is overall protected. there's another element here in europe would be ham personed by the level of growth we have and the ability of countries to pass on prices and i think they would be falling sharply. >> kayla is this. >> randy and michael, iran is still saying that oil output is

steady and even when a lot of these companies are operating legally they do it discreetly. they don't track so closely so if output is steady and companies are still able to do trade with iran, what's behind the price rise and what are we seeing here? >> people are going to try to put more into stockpiles because they're concerned something could go wrong. so i think it's natural that you see some of the prices even if there is more current trading because of the uncertainty going forward. i would agree if i saw tanker rates rising. people are out in putting it into storage per se. right here right now it looks like a speculative move. we should be seeing if those move and clearly it would be more significant when we come back to the issue of prices year on year comparison in august.

>> talking about the airlines, are we in an environment where it's getting much harder to pass on these higher costs? >> i think it's really, christine, very much dependent on which particular stock and which particular sector. i would imagine if you are building materials construction of which 30% to 40% of the cost of what you make is energy, you are going to really struggle in this environment and passing on any kind of price increase as a result of energy. so that's fairly straight forward. it seems with the reduction in capacity at least in the european airlines at the moment that it's not so difficult passing on prices on the airline side so there seems to be some degree because of the reduction in flying capacity. >> we've also seen dramatic cut back in compass itty in u.s. airlines and so they're more

able to pass prices along because price increases along because everyone is just right at the competitive edge. it's amazing how virtually every plane i take is full or nearly full. >> randy, thank you very much for your thoughts. michael, you as well. i have to go, on the other hand. i will start my weekend now so enjoy the rest of the show with the two ladies. i'll be back monday with news moving markets in asia. >> and, christine, i promise i wasn't trying to make you leave any earlier. we were saying good-bye to silvia earlier. but have a wonderful weekend and i will see you very soon. stay tuned to cnbc. treasury secretary tim geithner will be on u.s. "squawk box" at 8:30 a.m. eastern time. and coming up later in the show the dow and s&p 500 will shoot again today for new highs. will markets be able to hold and build on these levels? [ male announcer ] technology accelerates at a relentless pace.

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welcome to the show today. the headlines that we're looking at, the s&p follows the dow's lead approaching levels last seen in 2011. it's only seven points shy of the 52-week high. and aig swings to a big fourth

quarter profit in a bailed out insurance giant is confident it can keep generating solid numbers for several years. >> greece to launch its mega debt swap after gaining parliamentary approval taking athens a step choser to a $130 billion bailout. and volkswagen doubles its profit in 2011 as car sales climb. they lift the dividend to three euros a share. nice to have you here on "worldwide exchange" on this friday. the u.s. markets about four hours before their open. the s&p would open about five points. the dow would open about 38 points coming off its early, early morning highs here. the nasdaq would open just shy of ten points into the green today coming off of a week of gapes. we'll see if we can hold to

those levels in the dow and the s&p. b beccy? >> looking at the ftse is a real laggard. it is hovering around the unchanged level now. you have the lloyd's numbers and that has taken a shine off. the dax is up. half a percent higher for the cac in paris. we also see gains of over 1% in italy in spain the markets are looking flat. kayla? everyone in the u.s. is paying attention to the dow as it tries again and again to pass the psychological 13,000 mark. it appeared to briefly earlier this week. as far as the s&p 400, it's also very close to an important level, to within a fraction of its 2011 closing high of 1363. still with us is michael brown, fund manager at martin curry. and, michael, i want to ask you

about this psychological level. we use that term all the time when we talk about 13,000. what does is it say that we pierced it, have come back down and are hovering just below? >> normally that's the kind of market pattern you get. you don't get an immediate breakthrough. you move up and back and people like to think about it because it becomes something in the press and they get very excited about it. if the fundamentals are there, it will move through. if the fundamentals of the u.s. economy continue to progress then you will see at some stage a break at that particular level. there is a lot of resistance here. it's a classic high we've been through several times before. there's going to be a fight to move it through. it would be up to the individual corporate news to drive that index. >> we are looking for gains of 20% plus. the dow up by well over 20%

since early october levels. did you manage to get into that is this did you see it coming? >> we did, yes, actually. we are running a hedge fund. we don't 0 necessarily run 100% long into a movement like that. we're up about 6.5%. we've had a pretty good start to the year. obviously that's very, very cleansing. i think the second part is where does it go from here? we've seen that rally. yeah, the two issues we discussed here, one is further monetary easing on a global scale and i think that's pretty much a given. as long as we live in an environment where wages are rising less than inflation, you're going to have to continue to pump money to stop deposits fleeing out of the system. it's really a simple equation.

the question is how -- what sort of recession does europe have at this point in time and the key there is really interesting this morning. oh, look. that recession looks like it may have been milder than we thought it was going to be. we are back producing. that gives you a pickup in the first and second quarters. after that it will probably slow down. that will have a big influence because i think that's a real surprise that people are not picking up on. >> as long as we continue to see the progress on the monetary side, see further additions of easing, then there's no reason why the gentle recovery clearly building in place should not continue. now i think you'll have quarters where it could be much quicker and where it will be slower.

we're going to see some volume tifl yesterday a good set of numbers. what's there not to like? >> michael, this is kayla. i want to go back to your earlier comment about whether we see a sustained rally, that being dependent on the fundamentals of big corporates. we are in the thick of the earnings wave here in the u.s. the outlook hasn't been great even if the numbers have been okay. the outlook hasn't been great. what does that say about where the markets are headed and this rally? the fundamentals going forward don't seek like the expectations are very good. >> that's kind of quite interesting because over this side of the big pond we're

actually seeing outlooks not as bad as we'd anticipated. i know that sounds like a negative, it sounds like it's difficult to get your head around but actually we are looking at outlooks that don't seem to be as difficult as we anticipated. and that's why when i look at the earnings season so far the performance is considerably better on the day they report than the last four or five quarters and that's because the companies that have missed their numbers have not been hit as hard as the market anticipated and that's because the bad news is in the price at this particular moment in time. it may be the dollar strengthening somewhat but that is taking the gloss off the outlook for the next quarter in the states. here in europe it's the opposite way. >> michael browne, fund manager.

thank you for being with us today. still ahead on "worldwide exchange," men like mark zuckerberg and bill gates have amassed great fortunes from their life's work. but our next guest says the rich of today aren't like the robert barons of the past. they are trying to save the world's social problems. we discuss how these titans are creating abundance for all.

welcome back. basf has beaten expectations for net profit sales in the fourth quarter and given bullish forecasts for the coming months. patricia szaras? >> reporter: the market is rewarding the company as well at the moment bsf is trading up about 2% earlier on the year up even more than that. so the numbers were good. the dividends were increased by more than 13%. the outlook was interesting because it was split between the first half of the year and the second half of this year with momentum speeding up during the second half of the year. all in all they were cautiously optimistic for the outlook for the company. earlier on we had the ceo the basf on "squawk box." i asked him in particular about the price development, the margin development because of the increase in the oil price we have seen as of late. this was his answer.

>> we saw some marginal pressure during the second half of 2011 and that is based on the steep increase of the price of oil which continued during the first days of 2012. i think that is our biggest concern now is the oil price. if this keeps going up, that should really pose a threat to the global recovery and also to our business. our assumption is it will be at $110 per barrel. if that is the case then our guidance for 2012, i think, is realistic. >> reporter: interesting growth dynamics because they are seeing good growth from the u.s. they are seeing through the year 2012, ie, january is looking good. europe, the growth there is rather slow. china, still out because of the chinese new year. all in all the market was very satisfied with what they had to

say. but, as i said, or as he said, the oil price is definitely the linchpin also in the guidance. for now they are standing by what they are saying. if it goes north of $130 a barrel, we may see a revision for basf and other players in the sector. kayla? >> thank you so much, patricia, for that bit of earnings optimism. to back up what michael browne was saying a little bit earlier. but we're moving on to our next guest. he is usually focusing his eyes on the stars. he's a major proponent of space travel and is the brains and brawn behind several commercial space flight ventures. he has several earthly ideas about how technology, robotics and water projects can lead to a better future for those of us planted on the ground. with us today is peter, the founder who just release add book called "abundance." "abundance: the future is better than you think."

what will make it better? >> we have a number of forces in play that have been improving life over the last 100 years and they're accelerating. we have technologies, robotics, nano materials, 3d manufacturing, all kinds of different areas that are allowing individuals to do what only large corporations and businesses could do before. >> and large corporations are behind this. >> we have extraordinary people, the x prize foundation from larry page and wendy and eric schmidt. we also are launching these large scale competitions with companies like medco and qualcomm google who are putting these large cash challenges that say the first person to solve these problems that humanity has gets this cash award and it's driving incredible breakthroughs. >> what caused the change from people wanting to make money for money sake, wanting to make money to answer the big question marks that have been looming over society for a long time?

>> sure. so a lot of wealth today is being made by people very young in their age from the dot-com, the mobile phone breakthroughs and so forth and they're making their billions during a socially conscious era and instead of building buildings to their names, they are focused on, can i slay challenges during my lifetime and leave that has a legacy? >> someone argued that facebook, yes, it claims it's a social utility but we haven't really seen a lot of its power unleashed and the good that it could do. >> we've seen arab spring, right? we're seeing social media literally bring democracy to peoples around the world which is an extraordinary capability. >> and as far as bill gates and former president bill clinton. >> he is going after ma layer wra. we have president clinton going after literally disease and social improvement around the world. individuals now have the chance to touch the lives of billions of people and improve them. >> but these are long-term problems.

>> they are but the tools and the power that people have to solve them is accelerating. >> so are we going to see long-term solutions or is some of this money going to be able to see real life solutions while some of these people are still alive? >> we launched the qualcomm x prize, people are building devices that can diagnose you better than a board certified doctor. that will be in the next four and a half years. >> thank you for being here. peter diamandis of the x prize foundation with us today. up next on "worldwide exchange," we'll take a look at the trading day ahead on wall street as jcpenney and "the washington post" all report numbers before the bell.

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well, aig's fourth quarter profits surged 77% shooting past analyst forecasts. the bailed out insurer benefitted from a massive tax gain it took after they determined it will keep generating solid profits for the next several years. the tax boost comes from the reversal of write-downs aig had taken during the financial crisis in 2008 to reflect the lower value of its tax deferred assets. the ceo says he's in no hurry to retire and may stay on beyond this year even though ben mochet was diagnosed with cancer in 2010. aig in germany is trading up more than 9% today. great trading for the company that did a giant re-ipo last year. also looking at gap, fourth quarter profits dropped 40% as the retailer dealt with higher costs and had to discount level during the holidays to get customers into its stores.

gap's 2012 outlook is just slightly shy of analyst forecasts but the company has authorized a $1 billion share buyback and will hike its annual dividend by 11%. shares of the gap are down slightly, about .25%. the final report on february consumer sentiment is out at 9:55 a.m. eastern time. analysts are looking for a reading of 73, down two points from january. and at 10:00 a.m. we get january new home sales, forecast to rise 2.6% to an annual rate of 315,000. also in the retail sector, jcpenney reports results before the opening bell. we also hear from "the washington post." cnbc's steve liesman has an exclusive interview with treasury secretary tim geithner on u.s. "squawk box" at 8:30 a.m. eastern time. joining us now is chris girsh. chris, thanks for being with us today. we've had a conversation throughout the morning about the

technicals in the market and how sustainable this rally is. i imagine you have a thesis on that issue. >> yeah, the technicals, the fact that we're over the 1350 range only for the third time for a prolonged amount of time, if you think about it before that it was the dot-com bubble and a couple years ago we had the mortgage backed security crisis and the housing bubble and everyone is wondering what's going to happen now that we're above 1350 and everyone has the warm, fuzzy feeling. you look at stocks like sales for crm which gives a great indication where the u.s. market is in accordance to sales and growing entrepreneurial business and, you know, it crushed earnings for the fourth time in the last year. so what we feel on the floor is if we can hold that 1350 level we're set to have a really good second and third quarter. as long as we can hold that

technical level of 1350 right behind me. >> well, chris, it took a long time to get to that 1350 level. you know, if you move an inch a day you'll eventually get to a mile. we've seen a lot of range bound trading. how long will this last? yesterday up less than a tenth of a percent. yes, it's in the green but you can't really make a whole lot of money on that. >> you can't. and, really, what individuals are worrying about this constant uptick is the volatility is so low, here in chicago with the vix is right about at 17. and everyone, you know, is sort of waiting for the next shoe to fall. but all the earnings continue to be so good, the iran conflict has sort of taken hold and what i feel as a currency trader primarily is we see a lot of dollar dumping now and this rally is just an inflation play. you look at the commodities in the other room at the board of trade and everything is upticking slightly but that's

just on the weak dollar. >> mike, we've got various earnings reports. we have all sorts of economic data around the world. which are the indicators you are keeping your eyes on in the next week or so to get a fwrim on what the real status of the global economy. >> we'll have the end of february, will look strong at auto sales. it's a big, big part of any economy on the globe today. and if auto sales are holding up, inteed in the states we're expecting a good february season. the extra day in february this year. if sales are holding up it will tell you a lot about the real state of the consumer because the great thing about auto sales is they're not financed by banks. they're financed by the auto companies themselves so it's a really clear, really simple read. that's what ale be looking at. >> chris, what do you think of looking at auto sales as an indicator? >> i'm really more looking to

what they're buying, not necessarily how much they're buying. the fact that in the u.s. we have a bunch of, you know, prices around here in chicago that are will the $5 with oil at $108 a barrel f. iran continues to be an issue i really think that you're going to see a lot of the smaller, cheaper, longer gas mileage units being used and if that's an indication but if we continue to see the jeeps and the bmw x-5s being bought, consumer spending will have to give up somewhere else. >> chris, i'm afraid we have to leave it there. chris gersh at altimus capital. thank you for being with us. i'm afraid that is our show for today. beccy, thank you for letting me parachute in and be on "worldwide exchange." it's been a pleasure and hopefully i will see you again soon and we will see how the u.s. market opens today. >> thanks very much for watching "worldwide exchange." we will be gone for the weekend but back next week. uh oh.

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good friday morning. oil prices headed for a fifth straight weekly dwayne. the key catalyst, iran. but the bulls are trying to battle through it. stocks ending the day higher. the dow now just shy of 13,000. 9 we will discuss the markets, the economy, politics, and much more with a parade of newsmakers this morning. st. louis fed president jim bullard, pimco's tony, former gop presidential candidate jon huntsman, and treasury secretary timmy geithner. it's friday, february 24th, 2011. "squawk box" begins right now.

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